Energy & Environment

Problem Solvers Caucus says gas tax increase possible infrastructure funding option

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The House Problem Solvers Caucus on Friday said that a gas tax increase was a possible option to pay for infrastructure measures as an alternative to a corporate tax hike.

In a report released by the 58-member centrist caucus, the group called to index gasoline and diesel taxes to a number of factors, including highway construction costs, inflation and fuel economy standards. The caucus also suggested a possible vehicle miles traveled tax (VMT), which proponents have noted would collect revenue from electric vehicle drivers as well.

The caucus’s suggestions came as part of a broader package of recommendations to pay for the Biden administration’s $2 trillion American Jobs Plan.

“Historically, the federal government has paid its share through the Highway Trust Fund, which is funded primarily through the federal user fee on gasoline,” the report states. “However, in 2008, spending exceeded declining revenue in the fund for the first time since its inception in 1956.”

The report also notes that changing federal fuel economy standards and the increased proliferation of electric vehicles have made gas tax revenues less sufficient.

The caucus suggests “alternative user fees that take into account changes in technology and mobility use, and equitably distribute the costs of maintaining and constructing transportation infrastructure.”

Their suggestions on this front include a “modest” yearly registration fee for electric and hybrid vehicles or a freight value-based user fee.

The tax has remained at 18.4 cents a gallon for nearly three decades, with the last increase made in 1993.

The Biden administration has said an increase would violate its pledge not to raise taxes on those making under $400,000.

Several key senators have indicated they will not support a gas tax increase to pay for the Biden administration’s infrastructure package.

Sen. Bernie Sanders (I-Vt.) told reporters Wednesday that “the American people understand that the wealthy and large corporations have got to start paying their fair share,” particularly when it comes to infrastructure.

Sen. Joe Manchin (D-W.Va.), meanwhile, told reporters who asked him about a gas tax hike, “Oh, hell no. Don’t raise them.”

The news from the Problem Solvers Caucus comes after Transportation Secretary Pete Buttigieg initially suggested a gas tax hike or a VMT in March as a potential alternate source of revenue. However, both Buttigieg and White House press secretary Jen Psaki later said the idea was off the table.

President Biden “does not believe that paying for this historic investment in rebuilding our nation’s infrastructure and creating millions of jobs should be on the backs of Americans,” Psaki said in mid-April. 

Her comments came after Rep. Donald Payne Jr. (D-N.J.) said Biden had been receptive to a gas tax hike in a meeting with members of Congress.

Updated at 3:25 p.m.

Tags Bernie Sanders Gas Tax Jen Psaki Joe Biden Joe Manchin Pete Buttigieg Problem Solvers Caucus

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